The impact of Medicare shared savings program participation on hospital financial performance: An event-study analysis.

Objective: To evaluate the impact of hospitals' participation in the Medicare Shared Savings Program (MSSP) on their financial performance.

Data Sources: Centers for Medicare & Medicaid Services Hospital Cost Reports and MSSP Accountable Care Organizations (ACO) Provider-Level Research Identifiable File from 2011 to 2018.

Study Design: We used an event-study design to estimate the temporal effects of MSSP participation on hospital financial outcomes and compared within-hospital changes over time between MSSP and non-MSSP hospitals while controlling for hospital and year fixed effects and organizational and service-area characteristics. The following financial outcomes were evaluated: outpatient revenue, inpatient revenue, net patient revenue, Medicare revenue, operating margin, inpatient revenue share, Medicare revenue share, and allowance and discount rate.

Data Collection/extraction Methods: Secondary data linked at the hospital level.

Principal Findings: Controlling for trends in non-MSSP hospitals, MSSP participation was associated with differential increases in net patient revenue by $3.28 million (p < 0.001), $3.20 million (p < 0.01), and $4.20 million (p < 0.01) in the second, third, and fourth year and beyond after joining MSSP, respectively. Medicare revenue differentially increased by $1.50 million (p < 0.05), $2.24 million (p < 0.05), and $4.47 million (p < 0.05) in the first, second, and fourth year and beyond. Inpatient revenue share differentially increased by 0.29% (p < 0.05) in the second year and 0.44% (p < 0.05) in the fourth year and beyond. Medicare revenue share differentially increased by 0.17% (p < 0.01), 0.25% (p < 0.01), 0.32% (p < 0.01), and 0.41% (p < 0.01) in consecutive years following MSSP participation. MSSP participation was associated with 0.33% (p < 0.05) and 0.39% (p < 0.05) differential reduction in allowance and discount rate in the second and third years.

Conclusions: MSSP participation was associated with differential increases in net patient revenue, Medicare revenue, inpatient revenue share, and Medicare revenue share, and a differential reduction in allowance and discount rate.